Europe’s Thirst for Cheap Labor Fuels a Boom in Disposable Workers

Pardubice became a low-cost manufacturing hub after the fall of Communism.

It managed to attract Foxconn in 2000 after the Czech government gave the company a 10-year investment tax break. Foxconn quickly energized the region, buying a mothballed electronics factory and hiring thousands of workers. Restaurants, clothing stores and other businesses soon sprang up to cater to the growing population.

Agencies like Xawax are a powerful tool for Foxconn and other manufacturers to juice productivity and manage costs.

The Taiwanese company has assembled electronics for HP, Dell and Cisco, using recruitment agencies to expand or shrink its labor force around production cycles. At its peak, about half of a nearly 10,000-person work force were temporary workers; today, the company said, there are 4,000 workers, of which 20 percent to 30 percent are temps.

The agencies give Foxconn and other companies another advantage: The workers aren’t technically employed by Foxconn. The setup transfers legal and other responsibilities, including the risk of potential labor violations, to the agency.

In the cement dorms, which are managed by Xawax and other agencies, workers from Romania, Slovakia and elsewhere filed in from an afternoon shift and cooked a modest meal in a threadbare communal kitchen. They were tired, but neither the heat nor the hot water was working. One grumbled that he had lost pay after he injured his arm on the assembly line. Still, the workers said, they needed the money.

Momentum has been building for greater protections. The European Commission, the European Union’s executive arm, is proposing a new labor authority to fight questionable employment schemes. President Emmanuel Macron of France wants to tighten labor rules in the region.

Companies like HP and Cisco, which contract Foxconn in the Czech Republic to assemble electronics goods, have also created strict codes of conduct for the ethical management of foreign migrant workers by their suppliers.

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Dell said it required suppliers ensure migrant workers receive contracts that enumerate employment terms in a language they understand, and worked with suppliers to correct violations. A recent assessment of Foxconn’s production in the Czech Republic did not identify any issues related to migrant workers, Dell added.

Here in the Czech Republic, the authorities have been looking into Foxconn’s labor practices, though Jiri Vanasek, the deputy labor minister, acknowledged it can be hard to prove wrongdoing. The government is also scrutinizing the country’s many employment agencies. It recently imposed a registration fee to discourage attempts by agencies to change their names frequently to avoid issuing permanent contracts once temporary ones have expired, and to clamp down on fly-by-night operators.

Critics say, however, that despite efforts to increase protections, European regulators need to close loopholes in labor laws that foster unstable employment, low wages and a cycle of precariousness.

“If there’s a race to the bottom,” said Rutvica Andrijasevic, a senior lecturer at the University of Bristol who has researched Foxconn’s impact on European labor standards. “It’s being driven by our own governments.”

Photo

Migrant laborers in Pardubice waited for a bus operated by an employment agency that would take them to jobs on the night shift.Credit
Milan Bures for The New York Times